Does the Pearce Bespoke franchise agreement state that the liquidated damages amount is considered a reasonable estimate of the franchisor's potential damages from a violation of confidentiality or non-competition?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ctive relief will be entered by a court of competent jurisdiction enforcing the non-competition covenants without Franchisor posting any bond or security, in addition to all other remedies that may be available to Franchisor at equity or law.
E. Liquidated Damages – Violation of Confidentiality or Non-Competition Covenants. In the event Franchisee violates the covenants of confidentiality and/or non-competition set forth herein, Franchisee shall pay Franchisor a lump sum payment (as liquidated damages and not as a penalty) an amount equal to One Hundred Thousand Dollars ($100,000.00), plus Franchisor's attorney's fees, for each such violation. Franchisee acknowledges that a precise calculation of the full extent of the damages that Franchisor will incur in the event of Franchisee's violation of the covenants of confidentiality and/or non-competition is difficult to determine and that this lump sum payment is reasonable in light thereof. The liquidated damages payable
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the franchise agreement addresses liquidated damages for violations of confidentiality or non-competition covenants. If a franchisee violates these covenants, they must pay Pearce Bespoke a lump sum of $100,000, in addition to Pearce Bespoke's attorney's fees, for each violation. This payment is considered liquidated damages and not a penalty.
The Pearce Bespoke franchise agreement states that calculating the full extent of damages from a franchisee's violation of confidentiality or non-competition is difficult to determine precisely. Therefore, the $100,000 lump sum is deemed a reasonable estimate of the potential damages Pearce Bespoke would incur.
This liquidated damages clause does not affect Pearce Bespoke's right to seek injunctive relief and other remedies. The $100,000 is payable in addition to any other amounts owed under the Franchise Agreement. This means that Pearce Bespoke can pursue both monetary damages and a court order to stop the franchisee from continuing the violation.